Tweet This

Cape May Brewing's President and CEO has left the NJ Brewer's Association after losing re-election to the presidency to form the Brewers Guild of New Jersey. A major rift emerged in the Association over permitted tasting room activities. Shown here is Cape May's tasting room.Cape May Brewing

On Feb. 26, Jamie Queli got some bad news. There had been a defection from the trade association she leads, and she was hearing about it through a press release that departing members sent to the media. Just three months into her initial one-year term as president, she and her fellow board members were more than a little surprised to learn that after getting voted out of office, the group’s three longtime leaders had quietly formed a separate organization and taken six well-established members with them.

“Here I thought we’d have a nice transition to get things in order, and lo and behold they opened up their own organization,” Queli says, offering the association’s first public reaction to the split. “We had no idea. They never contacted us.”

For only the second time in memory, craft brewers within one state would have two statewide associations to represent their interests. The first time, in Colorado, some members reportedly departed because they believed a board member from Breckenridge Brewery should step down after selling the business to Anheuser-Busch InBev. After five months, the sides settled on a compromise and regrouped.

The nine founding members of the new group, who call themselves the Brewers Guild of New Jersey (BGNJ), say they left because as owners of relatively large craft breweries who base their business models around outside distribution instead of tasting rooms sales, they need to pursue their own priorities. Professing to believe they can’t stuff a wide range of needs into a single organization comprised of breweries of all sizes and stages of development, they need to protect the interests of breweries that, like themselves, produced at least 2,000 barrels of beer (1 bbl = 31 gallons) the prior year.

“They feel forming their own organization is the way to go,” says Eric Orlando, former lobbyist for the original association and newly hired executive director of the splinter guild. He adds that the mavericks kept the move quiet so they could get their message out unadulterated and notes that so far, he's fielded inquisitive phone calls from about a dozen current and former association members.

The guild touts that its constituent breweries, who all opened in 2014 or earlier, brew 75% of the state’s craft beer. Queli counters that her usual members, some of whom have yet to pay 2018 dues, represent 90% of the state’s breweries and indirectly contribute an annual $575 million to the economy. From home late at night, Queli estimates 45 of the state’s more than 80 open breweries have joined or renewed so far this year, though a leaked list of paid members shows that number hovering between 20 and 25.

A few who weren’t invited to join the guild produce more than the 2,000 bbl minimum it set as a floor for entry. Queli’s own Forgotten Boardwalk Brewing distributes all over New Jersey and Philadelphia and houses a spacious and lively tasting room that draws crowds to South Jersey four days and nights a week. Regardless of the snub, she’s proud that instead of discriminating, the New Jersey Brewer’s Association (NJBA) represents a full cross-section.

“We have members from across the state. We’re a diverse group of people and a lot of our members came from different walks of life,” she says.

And while Queli doesn’t want to frame the situation as big-versus-small, within that group are a handful of modest breweries that sell exclusively or primarily within their own tasting rooms and would, in many cases, like to keep it that way. Feeling that these so-called Main Street breweries devalue its constituents’ outrageously expensive liquor licenses, the New Jersey Restaurant Association (NJRA)fights vehemently against any legislation that would relax the state’s uniquely restrictive rules on tasting rooms, such as allowing food service and eliminating a requirement that every patron must tour the facility each time s/he visits. Without the drag of these breweries, those that distribute outside a tiny radius may be able to more easily compromise with the NJRA on this and future issues.

In a sentiment that might get repeated if other states -- also facing tasting room pushback and increasing philosophical disparities between big and small -- make the same move, Brewbound reports former association president Ryan Krill of Cape May Brewing saying, “As the industry has matured … there are multiple business models and there’s no one-size-fits-all association that can represent all of that.”

As the Brewers Association and the Beer Institute -- two national trade organizations whose memberships overlap but don’t always agree -- discovered when they fought for competing congressional bills to ease the excise tax burden on alcoholic beverage manufacturers, eventually lawmakers have to choose to move one bill on a topic at a time. At the suggestion of a legislator friendly to the cause, the beer groups joined together with various beverage-alcohol associations for the first time to negotiate a bill they could all support. Congressional leaders attached the bill to their federal budget and President Trump signed it into law December 22, 2017.

In Trenton, craft brewers no longer necessarily speak with one voice in the capital or when working with the state’s Division of Alcoholic Beverage Control (ABC) Director David Rible to issue favorable regulations. Though both Queli and Orlando say they think the craft community has Rible's support, a leaked communication from the discontented group to the ABC dated January 17, 2018, shows them recommending the state forbid breweries from selling more than 49% of its beer for on-premise consumption within three years of obtaining or renewing their annual state license. Such a provision might have appeased the restaurant and beer wholesaler and retailer associations but would have proven economically disastrous to Main Street breweries.

Although Orlando says the authors of that communication were simply shaping a broad yet untenable ABC idea into one whose specifications minimized harm, it would have marked the first instance that's made its way into public consciousness of craft brewers advocating for mandatory limits on tasting room sales. In meeting with the ABC in person, he says they, along with a number of other affiliated and unaffiliated brewers, negotiated the entire provision off the table.

"Neither group ever wanted a minimum requirement for distribution," he says. "It was initially introduced into discussion by state regulators but has since been reconsidered."

Further, according to a private memo sent by the association's executives to its members, they learned last week that a long-standing annual state brewers’ festival will be hosted by the guild this year. Last year, the festival brought in a full quarter of the association's $100,000 revenue, according to someone familiar with the organization who does not want to be named because s/he doesn't speak for the group.

“We should all have a conversation as an organization if we want to support their festival,” the memo reads. “Given the fact that this newly formed organization does not allow many of our members to be members of their organization, and the funds raised from this festival would only support a certain class of larger format brewers only, what is your opinion?”

It would be unfair to hold younger, smaller breweries blameless, however. It's an open secret in the industry that instead of trying to displace iconic, wealthy brands like Anheuser-Busch InBev or even Samuel Adams in the hyper-competitive and limited marketplace, some choose to gun instead for more vulnerable, older regionwide craft breweries like Flying Fish Brewing and River Horse Brewing, whose owners all left the association. Typically they may try to sway retail beer buyers by positioning themselves as hyper-local versus just local.

Despite this, Queli says she favors some of the same legislative, regulatory and business initiatives Krill enumerated as priorities to Brewbound -- namely reforming the three-tier system – and that larger breweries could have worked on this and other issues in committee if they’d only asked to form one.

While she consults with the national Brewers Association and others on how to put the pieces of New Jersey’s craft beer community back together again, she’s announced the hiring of a full-time executive director and a part-time lobbyist to replace Orlando.

Going forward, she hopes to “increase membership value to really give our brewers resources,” she says. Goals include an allied trade discount, an education committee and a technical committee to bring in speakers to “make our community of brewers feel like they’re a part of an association that is trying to help them grow and expand.”

Like the guild, Queli looks longingly at neighboring Pennsylvania and New York, which boast laws that encourage rather than handicap prosperity for craft brewers. Not only can some of their breweries sell food, they can also sell wine and spirits made in-state.

Whereas association and guild members are just now slowly making their way toward getting permission to play background music and background TV and is hoping Rible agrees to allow a certain number of annual permits to host entertainment like yoga, trivia and UFC fight night or playoff football, Pennsylvania’s Sly Fox Brewery boasts an immensely popular yearly event for charity that would likely never fly in the Garden State.

“Sly Fox has this enormous goat race that generates a lot of money and lot of tourism,” Queli says. “Can you imagine if I brought a goat to New Jersey?!”

For every item on New Jersey brewers’ wish lists, Queli wishes everyone could push toward it together. Orlando says the separation shouldn’t be viewed as a rejection of association members but rather as a natural progression of change in an industry that’s growing. As for getting back together, he’s told media outlets that it could happen one day … if perchance everyone’s visions were to somehow align.

Cherry Hill, NJ, June 17, 2009 -- Gene Muller, founder and Flying Fish Brewing Co., poses with bottles of Exit 4 and Exit 11 beers at the brewery's former headquarters. The co-founder of the NJ Brewer's Association left the group in early 2018 to start the Brewers Guild of New Jersey. (AP Photo/Mike Derer)

For her part, Queli doesn’t understand why it shouldn't happen now – and without any bad blood.

“The association was started by legacy brewers but it grew,” she says, mirroring Orlando’s sentiments but from the opposite side. “It’s a natural progression of change in an industry that is up and growing.”

I’m a freelancer who primarily covers lifestyle trends with a focus on craft beer, alcohol, culinary tourism and sustainability. My writing has been published in Food + Wine, USA Today, US Airways, Eater, Thrillist, Philadelphia magazine, New Jersey Monthly and numerous nati...